PPP is a non-proprietary data encapsulation method that can be used in synchronous (ISDN) or asynchronous (dial-up) networks. Its stack is specified at layers 1 and 2. PPP was created to work with multiple protocols at the network layer, and does this with the NCP (Network Control Protocol), which is actually a family of protocols. It uses the LCP (Link Control Protocol) to build and maintain data link connections. The LCP and NCP are two of PPP's four components, along with HDLC and EIA/TIA-232-C.

PPP has two authentication methods: PAP and CHAP. PAP is done only at the link establishment phase. The remote device sends the username and password back to the local until authentication is acknowledged. Passwords are in cleartext. CHAP is used at link establishment and periodically to check if the device is still communicating with the original host. Refer to quidfoabro's excellent CHAP write-up for more information.